Will oil hit $100? It already did in some markets By Reuters

© Reuters. FILE PHOTO: A view shows oil pump jacks outside Almetyevsk in the Republic of Tatarstan, Russia June 4, 2023. REUTERS/Alexander Manzyuk/File Photo

By Alex Lawler

LONDON (Reuters) – With oil investors and traders focused on an oil-price rally that has come close to $100 a barrel, some grades of are already trading above that milestone, highlighting an expectation of tight supply.

The outright price of Nigerian crude Qua Iboe surpassed $100 a barrel on Monday, according to LSEG data. Malaysian crude Tapis reached $101.30 last week, said Bjarne Schieldrop, analyst at Swedish bank SEB, in a report.

Oil has risen to its highest level of 2023 as investors are focused on the prospect of a supply deficit in the fourth quarter after Saudi Arabia and Russia extended supply cuts. The two are the biggest producers in the OPEC+ group, most other members of which are also curbing output.

“The overall situation is that Saudi Arabia and Russia are in solid control of the oil market,” Schieldrop said.

, a global benchmark, traded as high as $94.89 on Monday and the related benchmark used for trading much of the world’s physical cargoes, called dated Brent, stood just above $96 according to LSEG.

Qua Iboe, and some other crudes priced against Brent, are above $100 already because they are based on the price of dated Brent plus a cash differential or premium, currently assessed by LSEG at around $4.25 a barrel.

Schieldrop said dated Brent is highly likely to move above $100 as “only noise is needed to bring it above.” Swiss bank UBS sees Brent futures reaching triple digits.

“We expect Brent to trade in a range of $90–100 over the coming months, with a year-end target of $95,” said UBS analyst Giovanni Staunovo.